The UK woke up this morning to the news that Britain has decided to leave the European Union. But what does Brexit mean for the housing market?
With a majority of 51.9%, the British public has voted to exit the EU. With the pound dropping to the lowest level since 1985, now could be a difficult time for the property sector.
What Does Brexit Mean for the Housing Market?
So what do the experts think?
David Cox, the Managing Director of the Association of Residential Letting Agents (ARLA), and Mark Hayward, the Managing Director of the National Association of Estate Agents (NAEA), have issued a joint statement on the UK’s decision to leave the EU:
“The outcome of today’s EU referendum will create a period of uncertainty among homeowners, buyers, investors, landlords and developers. We can expect international investors to look a lot harder at the UK as a market; this will have a consequential impact upon the housebuilding sector, as investment may be stalled.
“In the short-term, we believe that both prices, and rents, will remain stable, but we cannot be certain about the next quarter, as political instability and market unrest could lead through into prices in the housing market. We believe that the UK housing market is resilient, as is the supply chain that drives it. But as we indicated in our Brexit report last month, the bigger impact may well be in the skills necessary to drive UK housing development, and this is now a major concern for UK buyers and renters.”
The CEO of estate agent Marsh & Parsons, David Brown, also comments on the result: “Whatever result you were hoping for on a personal level, it’s hard to argue against the fact that this result will bring further uncertainty, and also creates far more questions than it answers in terms of what happens next as Britain extricates itself from the continent in terms of procedures and processes. It’s also worth noting that if the pound weakens against the euro, as some have predicted, then it could lead to a significant increase in overseas property purchases – not bad news in itself, but unlikely to have been among the intentions of many leave voters.
“On the plus side, it makes the picture clearer for any individuals who were sitting on their hands, waiting on the outcome of the result to make their move. It’s also worth putting things into a wider perspective. Irregardless of the referendum result, there is still plenty of pent-up demand in the UK housing market, and a leave vote doesn’t change that overnight. When you think back to before the financial crisis, and the volume of transactions we were witnessing on an annual basis, there’s clearly scope for further improvement. The decision to leave doesn’t alter the fact that plenty of people have to and still want to move.”